questionsdid you know olympic athletes are taxed on their…

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You get paid, you pay taxes.
A gold medal, which is worth $650, according to CNN, could cost athletes about $236 in taxes. While a bronze metal, which is worth $5, could only cost an athlete $2 in taxes

The U.S. Olympic Organizing Committee will award London champions $25,000 for a gold medal, $15,000 for silver and $10,000 for bringing home a bronze, Reuters reports.
At a 35 percent income tax rate, bronze medalists will owe the IRS a total of $3,500, silver medalists will owe $5,250 and top finishers will be liable for $$8,750, according to Americans for Tax Reform.
(Note that they don't tax the expense money, transportation and food that they receive.)
And this doesn't include the endorsement money many athletes make, which can be in the millions.

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I read that yesterday. Personally I don't think they should have to pay taxes on the value of the medal itself unless they sell it, at which point that income should be taxed like it is on any other goods and services that are sold. As far as the prize money goes I can see valid arguments either way. On the one hand it is a form of income but on the other hand they are representing the country in an international competition so it would be nice if that were tax exempt.

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They're not actually getting taxed on the medal other than its stated value, which isn't a whole lot of money, like $650 for a gold. The bronze only costs about $5. It's the prize money they're getting taxed on. If the medals came with no money they'd owe very little. This whole $9k for winning gold is ridiculous. They'd only have to pay that if they were in the top tax bracket.

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I didn't think that they were really gold, rather just plated.

And what is the value of a medal? I dont think they are supposed to sell them (it may be against the law in some countries) but I'm pretty sure some people do when they are down on their luck in later years. I don't know what they go for but I'm sure it is far more than the price of the metal in it.

The tax is, frankly, stupid. It either overvalues the medal (it will never be sold, it is a momento), or undervalues it (put one up for sale and see what it gets, way more than a few hundred).

How about we let he few people who win a medal not get taxed. I propose "paying" for this "tax break" by imputing the value of the freebies given to members of Congress (parking spaces, their own gym, subsidized cafeteria) and their staffs and taxing that as regular income. It would more than make up for it.

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"years of hard work and dedication"

The same thing could be said about income tax, which was originally just used as funding for wars, but has now been permanently imposed for a long time. I think this just just as unconstitutional as taxing Olympians on their medals.

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It's not the medal they get taxed on, it's the prize money.

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@wilfbrim:
First place: It is composed of 550 grams of silver (at least 925 grade) covered with 6 grams of pure gold (worth approximately $800 as of July 29,2012).
Second place: It has the same composition as the first place medal without the gilding (worth approximately $500 as of July 29, 2012).
Third place: It is mostly copper with some tin and zinc (worth approximately $3).

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Like I said, I am all for the prize money being taxed because, like with professional poker players, that is essentially their income. (Along with sponsorship deals that will be taxed as well.) However, I do not think they should be taxed on the actual medal, that is all because it is really just a memento. You would not tax someone on a little league baseball trophy or a company plaque would you?

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I agree that taxing them on the medals themselves is kind of silly, but from the IRS's standpoint, it's no different than if they won a car or a house. It's a prize, and they have to pay taxes on it. As for the cash award, it's prize money. It should be taxed like any other prize money. I agree that the Olympic athletes are in a special role as representatives of our country. But we tax all kinds of folks who represent our country, including soldiers and diplomats.

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i think if the item you win (doesn't matter how you won it) is over a certain dollar amount, you're supposed to report it on your taxes. not sure what that dollar amount is though.

I am not a tax attorney, nor do I play one on tv.

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@moondrake: It's not a prize. It's a major award!

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I think NBC should pay the athletes' taxes for them. If the athletes didn't win anything, then NBC wouldn't have anything exciting to put on a ridiculous tape delay, and then they wouldn't get the primetime viewership, the advertisers, or the profits.

I was joking when I first started writing that, but now that I'm finished, I think I'm serious.

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@smallbigtall: As I was reading that, I was appreciating the humor and at the end I do agree with you. The problem is, then the tax dollars would be taxed so they would then have to pay taxes on the dollars that they received to pay the taxes on.

I just wonder what kind of form the Olympic athletes will have to file to prove that they are Olympic athletes and how closely those forms will be monitored. I could see this becomes ripe with corruption.

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@wisenekt: I don't think little league baseball trophies are made from real gold...

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@dmaz: A telephone tax was created to pay for the Spanish American War and we are still paying that tax today. Once a tax is created, it is hard to get it to go away since someone likes the income and wants to use it for their own personal projects.

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If they have a good accountant, they won't end up paying taxes on it. It will be considered a business expense.
They are getting a bonus for what they do, they get taxed on it. If you get a bonus at work, you would get taxed on it too. It's not that big of a deal.

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Are the athletes taxed for the NYC Marathon metals? And are taxes for the awards of other major races and competitions of any type??

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@drj48: I'd imagine the NY Marathon Medals don't have much actual cash value, unlike the Olympic medals which, as I understand it, are made partly of precious metals. Awards/prizes from everywhere are taxed. The people whose horses win purses in a race, race car drivers, boxing champions, Superbowl winner (and loser) awards, even the Nobel Peace Prize award. If you receive cash or something valuable you pay taxes on it. Congratulations are not tax exempt.

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The argument that "they should only be taxed on the medal if they sell it" is stupid. When my employer gives me an anniversary pin for my years of service, they show it as a gift on my pay-stub and tax me for it accordingly. There is no way that anyone would pay money for those pins. They're all over the office and most of us throw them away because they're junk.

I don't think this should be treated any differently. I don't agree with the tax in general, but what's fair for one is fair for all.

Besides, most of these athletes rake in sponsors and do very well for themselves. At the end of the year, if the tax is too much, they'll be able to file a return and get back the excess. It's what we all go through and they shouldn't be treated any differently.

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I wouldn't be too worried about most of these athletes they get paid pretty well from sponsors, endorsements etc. (not all but most)
I have three college track teammates who are all competing this year in the Olympics and trust me they are not hurting financially. Many countries pay/award their athletes if they competing at this level.

Also if I am not mistaken income tax is determined by the country your reside in.
For example if a Canadian wins big in Vegas he/she can file to get most of the "tax" back. This may have changed but a family member 7/8 years ago won over $10000 in Vegas and when he got back filed and got most of his money back.

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@capguncowboy: What is the value of the pin? That doesn't make a lick of sense at all.

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@wisenekt: What I value something at verses what the company says its value is are entirely different. They probably buy them in bulk for about 10 cents each, but they report that they're valued at $10, so they tax me on that $10.

My point is that if I have to pay taxes on that stupid worthless pin, then it's only fair that Olympians should pay taxes on their Olympic Medals (and obviously the cash amount that comes with it as well).

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@capguncowboy: I agree with you, but I think it would be more ideal that everyone has to pay the same == NOTHING
[unless the award is sold]

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The things one can learn here just amazes me. Tax 'em all!

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Gonna throw the snopes article up there for this one: http://www.snopes.com/politics/taxes/olympics.asp. They give good analysis on it. What's interesting is they could be taxed on the medal, but they haven't in the passed.

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Since the Olympics changed to allow professional athletes to participate I have no issue with this. The ones winning the medals mostly have has money or services from outside sources to hone their skills so paying taxes on the winnings should not be an issue.

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Game show prizes are the same as Olympics prizes, they are received due to an effort made by the prize recipient and are considered as earned income. I think that the Olympic medal is more a keepsake than a marketable prize. Perhaps it is subject to sale but its intention is not to be put up for sale, like a game show's car or boat could be. There are options if someone wants to change it. The tax court makes tax laws based on the cases put before it. All you need to get into tax court is an action by the IRS and an appeal. Then there's going to your Congressman. I think prize money speaks for itself, otherwise.

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I am for:
If you win a gold medal in the Olympics your TAX EXEMPT for life!
Now That is some incentive to WIN! Sorry Micheal Phelps, you can only be TAX EXEMPT 1 time!

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This isn't really relevant to the question, but I wanted to clear something up: Many medal winners get little to no endorsement money. . . if they plan to compete in college (as many do) then they are not allowed to take endorsement money.

Take a look at the girls who won a medal in synchronized diving. They're not exactly going to be raking in the bucks in endorsements. (Does anyone even remember their name, only a few days after the fact?) One of them's in medical school. Medical school is crazy expensive. Any prize money she earns from the Olympic committee is going to be a significant amount of what she takes home this year.

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Much ado about nothing and political pandering here.

The athletes get $10k, $15k, and $25k for their medals which counts as income and are thus taxed. What the story leaves out as well as any other analysis is that that income goes against the many many expenses (equipment, nutrition, training, travel, etc) they incur as part of training, going to competition, etc. I guarantee you those expenses easily eclipses the few thousand they get from winning their medals.

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@first2summit: Then the athletes should itemize those as expenses when they file their taxes.

It's income, so if the rest of us have to pay taxes, I see no reason for athletes to be exempt. I've been an EMT and an RN. My two brothers are a Fire Fighter/Paramedic and a Police Officer, respectively. We pay taxes just like everybody else. Do those opposed to the athletes paying taxes honestly believe they deserve to be tax exempt when people who stick their necks on a chopping block day after day for the good of others lose substantial portions of their paychecks?

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@voxitage: Agree here.

There are many many problems with this idea. First is Olympic athletes. Why just them and not World Cup (soccer) and other international athletic events? Second is that it can be discriminatory in that only athletes who compete in OIympic sports can benefit from this tax protection. What if you're in a sport that's not in it? Or a demonstration sport?

In comparison to those in, frankly, real jobs that risk life and limb don't necessarily get such benefits after receiving some medal. Those in the military who have been killed in combat are relieved of their tax liabilities for that year but it's a fool's argument to even think of comparing the two.

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At least my U.S. Representative is paying attention. (now maybe I'll start calling him Blake instead of "Blank")

Here is a link to an article about legislation he proposed with another rep from Florida.

http://www.caller.com/news/2012/aug/02/farenthold-proposes-tax-break-olympic-medals/?partner=popular

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I am still wondering when the Pecker tax goes into effect

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@capguncowboy: Gifts of up to $10k are exempt from taxation. It's a little tricky when it comes to gifts from employers....is it a true gift, or part of your pay? A good tax attorney would get that amt that was deducted from your paycheck back for you in a refund.